Since you need to register land/house at the national registry (or similar), they require that you pay a tax before you can execute such a registration. Obviously, you can lie here but at least they are getting something out of it. Other tricks are taxes when you are leaving the country (buy a stamp so that you can board a plane), arbitrarily giving tickets on highways, super high taxes on telecommunication, cars and other stuff where you need to go through government, taxes collected by municipality go to the government instead, etc...
It'd be interesting to study all countries and deduce that if a government is using these measures then it is a failed government.
What is this about? Genuinely curious. (Indian, and I haven't heard of this before.)
https://joshandmakinternational.com/legal-procedure-pertaini...
Source: family selling a house in Karachi
It is not "equally" prevalent. It is at least an order of magnitude worse. Almost everything in Pak is about an order of magnitude worse than in India. Almost everything, except civic violence - that's about 2-3 orders of magnitude worse. The establishment has traditionally had other priorities. The current PM is trying to fix some things but faces tremendous pushback.
https://en.wikipedia.org/wiki/Stamped_paper
Quote from wiki - "The use of stamped paper in the American colonies was so unpopular that it has been credited with sowing the seeds of the American Revolution"
The fee paid here is calculated as a percentage of the price paid for the land/property. So everyone buys (on paper) at exactly the ready reckoner rates (the minimum prices) and then pay the minimum taxes (or registration fees). While in reality the prices are way higher than the ready reckoner prices (generally 5 to 10 times) and so the rest of the price is paid in cash (unaccounted black money).
If I may ask: Where in India so you like to spend your time in terms of urban/rural India? Have you found any life-threats just because you're a foreigner?
Sub-registrars often refuse to value the property at the ready reckoner price. I've seen transactions where the registered value was more than 60% of the actual value, though this is in an urban area.
A lot of Real Estate deals happened with significant cash percentage so that people could cheat with Stamp duty and Registration. At the same time, this also inflated the prices , thereby making them unaffordable to a large section of society.